Figure 4.3—Changes in the national poverty rate under growth scenarios, 2003–15
Poverty rate (percent) 52
40 42 44 46 48 50
Livestock Industry Baseline
Export crops Foodcrops Agriculture
Source: Kenyan dynamic computable general equilibrium model results.
high (about 10 percent per year). Therefore, over and above the need to generate broad-based agricultural growth to ensure regional equity, it is unlikely that a strat- egy based on a single sector will be able to generate the levels of growth necessary to signifi cantly raise growth and reduce poverty.
Agricultural Investment Analysis
Public Spending and Agricultural Productivity So far we have identifi ed agriculture as an effective source of poverty-reducing growth. Next we consider how public investments can be used to accelerate agricul- tural growth, taking into account fi scal implications. Although there are many necessary interventions, there is some consensus in the empirical evidence. Given the constraints to area expansion in Kenya, policies should focus on raising agricul- tural productivity (Nyoro and Jayne 1999). The empirical evidence suggests that several binding constraints have lowered agricultural productivity. These include poor access to credit and farm capital (Ekbom 1998); low use of farm inputs, espe- cially fertilizer (Nyoro and Jayne 1999; Odhiambo, Nyangito, and Nzuma 2004); and a lack of technical knowledge among smallholders that has limited the use of pesticides and other farm inputs (Evenson and Mwabu 1998; Nyangito 1999). These constraints emphasize the need for extension services over and above rural